CIF and DDP under Inco terms 2020

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Difference between DDP and CIF under delivery rules

Delivered Duty Paid to a named place (DDP) and  Cost Insurance and Freight (CIF)  under Incoterms 2020

What is the difference between DDP and CIF delivery terms under Inco terms 2020

First of all, CIF rule is meant for movement of goods on waterways, as it is known as Marine restricted mode of transport whereas DDP rule may be used for movement of goods by Air, Sea or Land.

Another difference between DDP and CIF is; compared to CIF terms, higher risks and costs are involved for a seller under DDP terms for movement of goods, as he is responsible for pre carriage, main carriage,  on carriage, import customs clearance and import duties if any. 

Under CIF rules, the seller discharges his obligation on costs  when goods arrives at named destination, but risks transfers to the buyer immediately upon the goods loaded to the Carrier in Seller’s side.  But under DDP terms, the seller is liable to undertake the risks and costs when goods are delivered to buyer at his premises or named place contracted.

In an international trade, the seller is responsible for Import clearance at buyer’s country under DDP. But under CIF terms, the buyer is liable for the costs and risks of import customs clearance and duties at buyer’s country.

Under a contract of carriage DDP, on carriage is under the risk and cost of Seller.  But on carriage responsibility under CIF is on the shoulder of buyer.

Under a contract of carriage, CIF term, the seller is responsible to arrange minimum risk cover of insurance on movement of goods as per Incoterms 2020.  However, as per  incoterms 2020 neither the buyer nor the seller is responsible to arrange insurance under DDP terms of delivery of goods which may be decided both buyer and seller separately. 

Under CIF delivery terms, delivery of goods takes place when the seller hands goods over to the carrier whereas under DDP terms, the delivery takes place at the destination named place at buyer’s premises or named place.

Click below to read CIF and DDP separately written to understand both terms in detail:

CIF  Cost Insurance and Freight

DDP  Delivered Duty Paid

The details given above describe the difference between DDP and CIF.  Please share your views about the difference between CIF and DDP below:

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